A Sneak-Peek Inside Gap’s First India Store – India Real Time – WSJ

Gap Inc. is going retro for its debut in India, wagering that its branded sweatshirts will be best-sellers thanks to their association with Bollywood.

“These will be the first to fly out from our store,” said Stefan Laban, senior vice president at Gap International, standing next to a wall of Gap-branded hoodies, shoulder bags and caps in the New Delhi outlet, which opens Saturday. “We’re especially going heavy on logos in India.”

The reason? Bollywood superstar Shahrukh Khan may have something to do with it. Fans of the actor went Gap-hoodie crazy when he sported the garment in 90s blockbuster, “Kuch Kuch Hota Hai.” The fact it wasn’t available in India added to the sweater’s cachet.

Oliver Kaye, who heads Gap’s business in India, says that hoodie wasn’t sponsored by Gap and credits the Indian actor for drumming up interest in the retailer two decades before it actually arrived here.

Another popular Indian actor, Kangana Raunat, wore a round neck Gap-emblazoned shirt in “Tanu Weds Manu Returns,” a romantic-comedy released earlier this month, further positioning the brand as aspirational for Indians. Ms. Raunat is expected to be the chief guest at the store’s opening this weekend. Gap says they didn’t pay her to promote the brand either.

Best known for its khaki pants and arsenal of denim jeans, the American retailer is playing up its colored pieces and bling for the Indian market. The company has been criticized elsewhere for a monochrome palette and is lagging behind fast-fashion players such as teen retailer Forever21 Inc. and Inditex Group Inc.’s Zara.

“Indians love color,” said Mr. Kaye, pointing to a rack of shorts available in shades from fuchsia to aqua to florals. The designs were selected after hundreds of consumer interviews in India. Gap’s merchandise in India is priced between 799 rupees ($12) to 5,999 rupees ($94.) That’s more or less in line with how it prices its garment in its home market in the U.S.

The company is focusing on color for the Indian market with saffron shirts… Preetika Rana/The Wall Street Journal

…And fuchsia shorts. Preetika Rana/The Wall Street Journal

They’re also tuning up the bling with these sparkly tops. Preetika Rana/The Wall Street Journal

The company has also identified a gap in the kids and babywear market in India. Nearly 40% of its store space is dedicated to its babyGap brand with everything from striped swimsuits for kids to hot pink sandals for toddlers.

“This space is extremely untapped,” Mr. Laban of Gap International said. “There’s really no competition in the Indian market when it comes to this segment.”

Gap is selling frocks and jumpsuits from its babyGap collection as it hopes to persuade parents to part with their cash. Preetika Rana/The Wall Street Journal

The company says it has spotted a gap in the children’s wear market in India. Preetika Rana/The Wall Street Journal

Gap plans to open 40 stores in India in the next five years, with about five each in New Delhi and Mumbai. Arvind Lifestyle Brands, which brought Tommy Hilfiger and Calvin Klein to the country and now holds Gap’s franchise rights, expects the business to generate revenues worth one billion rupees ($156 million) by 2020. But quality real estate could be a challenge.

“There are very few quality malls in India. That’s definitely something we’re looking into as we plough ahead,” Ismail Seyis, who heads Gap’s franchise division, said. Real-estate consultancy JLL estimates that 70% of India’s 308 malls are struggling with anemic sales and high vacancy rates.

Gap comes to India six years after Zara and a few months ahead of Hennes & Mauritz AB’s planned autumn debut.